04ABUDHABI3386

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Diana T Fritz 02/05/2007 05:29:58 PM From DB/Inbox: Search Results

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UNCLAS ABU DHABI 03386

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CHARGE: PROG

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TAGS: ETAD ECON EFIN TC

SUBJECT: UAE HESITANT TO ENTER INTO GCC/UE FTA

IQ. (SBU) Summary: Gulf News reported recently that a
GCC/EU free trade accord would likely be signed within the
next few months. Officials from the UAE Ministry of
Economy and Commerce are not enthusiastic about the
potential FTA, and are skeptical that it will come to
fruition in the near future. End summary.

1.2 . (U) A 13 September Gulf News article reported that the

GCC and the EU recently accelerated their efforts to
conclude negotiations and were working to remove the final
hurdles to signing an FTA. The article stated that Saudi
Arabia decided to remove double pricing on gas, and in
return the GCC will ask the EU to lift taxes on
petrochemicals and aluminum products. Anonymous GCC
sources stated in the article that if the EU agrees to lift
the taxes, the FTA might be signed in the coming months.

13. (SBU) UAE officials are not optimistic about the
potential for an FTA and do not believe that it will be
enacted before the end of the year. In a recent meeting
with the Ministry of Economy and Commerce, a Ministry
official noted that a GCC/EU FTA would be very difficult to
enact, particularly because the UAE is not ready to open
some sectors that Saudi Arabia has already opened. He
noted that Saudi Arabia and other GCC countries are in
agreement regarding WTO provisions relating to goods, but
that Saudi Arabia is more forward leaning than the UAE and
other GCC countries regarding policies relating to
services. In a separate meeting with another Ministry
official, the official noted that the problem areas

regarding the FTA are due to the GCC countries being unable
to agree to equally liberalize certain sectors,
particularly insurance and investment.

T_4 . (SBU) During a meeting this summer in Riyadh to discuss
the negotiations, the UAE advocated moving slowly and
waiting for the EU to offer concessions that would advance
negotiations .

Sison